Murphy Oil to spud instrumental wildcat wells Cello and Banjo around mid-2025

Murphy Oil is gearing up to spud two harmoniously named wells around mid-2025 in the deepwater US Gulf of Mexico, a core operating arena for the company and a potential driver to lift its total oil and gas production by over 15% by the end of the decade, the company's top executive said Jan. 30.

The Murphy-operated back-to-back exploratory wells, with the melodic names of Cello and Banjo, are located on the same block in the prolific Mississippi Canyon area of the US Gulf, Murphy's new CEO Eric Hambly said during a fourth-quarter earnings conference call.

They are sited about 10 miles from the Delta House producing platform, which is also owned by Murphy.

"We remain focused on lower-risk opportunities near existing infrastructure and highlight that these next prospects are located near the Murphy-operated Delta House floating production system," Hambly said, which makes them more economic to produce.

"Each well has an estimated net cost of $18 million, and we are targeting to spud Cello #1 in the second quarter, with Banjo #1 to follow in the third quarter," he said.

Delta House may produce the wells

Hambly's remarks suggest that if Cello and Banjo are successful, they could be tied back to Delta House and inexpensively brought online since the producing infrastructure is already in place.

Delta House is sited in water depths of about 4,500 feet, with a capacity of 80,000 b/d of oil and 200 MMcf/d natural gas. It was originally built by large US Gulf privately held producer LLOG Exploration and went into service in 2015.

Murphy, which produced 68,000 b/d of oil equivalent from the US Gulf of Mexico in Q4, acquired the Delta House infrastructure in 2019, along with a number of LLOG producing fields.

But Cello and Banjo by themselves won't be the main drivers of the production boost – there are other wells and activities that could have even more impact, said Hambly.

Murphy produced 175,000 boe/d in Q4, down about 5% year over year. During Q4, the company had several operational and weather-related impacts that brought down its production by nearly 11,000 boe/d.

For full-year 2024, the company's oil and gas production averaged 177,000 boe/d, and it expects to produce nearly 179,000 boe/d in 2025, with a long-term target of somewhere north of 200,000 boe/d by the end of the decade.

Flat 2025 total oil, gas output eyed

For 2025, Murphy expects to produce an average of 179,000 boe/d in 2025, which will be about flat year over year.

However, "in 2026, we'll bring online a high rate well in our Samurai field early in the year, and we're planning an activity at a very high rate, at a high-ownership field in the Gulf of Mexico, which we'll disclose later, that helps us significantly increase our Gulf of Mexico production," Hambly said.

"And then along with that, we have an execution through the end of this decade of our long list of Gulf of Mexico development projects that we were steadily executing within [our projected] capital allocation of $1.1 billion to $1.3 billion" per year, he added.

In addition, there is still more to do at King's Quay – a Murphy-operated Green Canyon-area hub located southwest of Mississippi Canyon. King's Quay, a producing platform, started in April 2022 to produce three fields -- Mormont, Khaleesi and Samurai. Those fields not only continue to produce but Murphy is finding "more and more pay to develop" in them, Hambly said.

"As a consequence of that, we've developed more wells, including the Mormont 4," he said. "The Khaleesi and Mormont fields in particular, have done tremendously well."

"We are now completing an ocean bottom node seismic survey over the [three] fields and surround areas, which we think will help us identify even further future development opportunities there, infill drilling zones that are not obviously imaged with our current seismic that we can develop," he added.

Moreover, Murphy is adding another Samurai well that will come online early in 2026, he said.